Currency Arbitrage Profit Fail

Given the following scenario: in the US, one US dollar is equal to 100 Japanese Yen, and in Japan, one US dollar is equal to 120 Japanese Yen. How do you make money with this fact? One possible way to make money with this fact is through currency arbitrage, which involves buying and selling currencies in different markets to take advantage of the price difference and make a profit. For example, if you have $1,000, you could convert it into 100,000 Japanese Yen in the US market, and then transfer the Yen to the Japanese market, where you can convert them back into US dollars at a rate of 120 Yen per dollar, which would give you $833.33. This means you could make a profit of $833.33 - $1,000 = -$166.67.

A screenshot presents a supposed currency-arbitrage strategy using different exchange rates in the US and Japan. The calculation produces a loss of $166.67 while calling it a profit, creating an ironic “profit” fail. It is used as a reaction to incorrect math, bad financial advice, or confidently stated nonsense.

• @pokupkabitka / 23752 2023-03-29